Baker & Holmes Co. v. Gibson

Decision Date10 August 1931
Citation136 So. 544,102 Fla. 891
CourtFlorida Supreme Court
PartiesBAKER & HOLMES CO. et al. v. GIBSON.

En Banc.

Suit by Cora Lee Gibson against Baker & Holmes Company, a corporation, and another. Decree for the complainant, and the defendants appeal.

Reversed with directions.

Syllabus by the Court.

SYLLABUS

Where lands are conveyed by a husband to his wife at a time when the husband is heavily in debt, and thereafter the debt is converted into a judgment and execution levied on the lands so conveyed, and the wife, grantee, files suit to enjoin the sale of the lands, the burden of proof is upon her to show that she paid for the lands with her separate money or property, and that she paid an adequate price and without knowledge that the transfer was being made to hinder or delay creditors.

A simple failure to record a conveyance of real estate does not of itself render the instrument fraudulent as to creditors but it is one circumstance which, in connection with others may avoid the deed. Where the instrument is a voluntary conveyance from a husband to his wife, and it is withheld from record until after equities of the husband's creditors without notice attach to the property conveyed either by reason of some lien, or because of credit extended upon the faith of the grantor's possession and apparent ownership of record of the property conveyed, the conveyance will be invalid as against such creditors. Appeal from Circuit Court, Lake County; J. C. B. Koonce, judge.

COUNSEL

H. C. Collins, of Leesburg, for appellants.

J. W. Hunter, of Tavares, for appellee.

OPINION

BUFORD C.J.

Baker & Holmes Company received on November 1, 1925, eighteen promissory notes made by Lake County Supply Company and indorsed by W. B. Gibson and one Hackney. Thirteen of these notes were paid and five left unpaid.

Thereafter, in June, 1927, three new notes were given in lien of the five old notes and were executed by Lake County Supply Company, with Gibson as indorser.

Baker & Holmes Company procured judgment against Gibson on the notes and levied on certain lands.

Cora Lee Gibson filed a bill to enjoin the sale of the lands under execution, claiming the same as her separate statutory property, meaning her separate property.

Baker & Holmes Company filed answer in which it was alleged that Gibson on the 21st day of June, 1927, became indorser on three notes aggregating the sum of $848.15, payable to Baker & Holmes Company; that Baker & Holmes Company accepted the indorsement of Gibson on the notes with knowledge that the record title to lands described and claimed by the complainant was in W. B. Gibson, and that such knowledge was the major factor in its acceptance of the said notes.

The answer further alleges:

'This defendant further avers that the said W. B. Gibson remained as the owner of all of the said lands until the 23rd day of September A. D. 1928, when there were filed for record in the Circuit Court of Lake County, Florida, five certain deeds wherein and whereby said W. B. Gibson sought to convey to complainant all the lands in Lake County, Florida, of which the said W. B. Gibson was the owner, including the lands set out in the bill of complaint in this cause, which said deeds are recorded in Deed Book 109 page 556 and page 557, and in Deed Book 141, pages 166, 168 and 169, respectively, of the Public Records of Lake County, Florida; this defendant avers that although said deeds were apparently executed long prior to the endorsement of the notes hereinbefore referred to, nevertheless complainant refrained from placing the same upon the Public Records of Lake County, Florida, until the said W. B. Gibson became indebted to this defendant as aforesaid: that no consideration passed from complainant to the said W. B. Gibson after the said indebtedness arose and that the placing of the said deeds upon the Public Records of Lake County, Florida, as aforesaid was an act of fraud towards this defendant for the purpose of hindering and delaying it in collecting the sum due it under the judgment aforesaid and that the said deeds therefore are null and void as towards this defendant.'

There were three deeds from Gibson to his wife. They were each executed apparently on the 8th day of November, 1926, and the record shows that each was filed for record on September 23, 1927. The creation of the obligation was explained by Mr. Baker as follows:

'Q. When were those notes given? A. On June 21, 1927.

'Q. When was the original obligation under those notes? A. I would possibly have to explain a little----

'Q. Go ahead and explain? A. You remember the Company, the Lake County Supply Company, was in trouble, and they agreed to make settlement with the creditors by paying a certain amount and giving notes for the balance, with the indorsement of Mr. Hackney, and Mr. Gibson, and these notes--there were eighteen of the notes for a certain amount $121.00 and some cents. I have forgotten the number of cents. They paid thirteen of the notes, and five of them were unpaid, and they were never paid, and finally we agreed to take other notes which was those three notes, and to give the gentlemen a reasonable length of time to pay them.

'Q. Mr. Gibson was endorser of those notes? A. Yes, sir.

'Q. Don't you remember about the time the original obligation was made? A. I think November 1, 1925.

'Q. When was this credit extended and the notes taken? A. This credit was extended, if I am not mistaken, in 1925. I think that was when they began to do business.

'Q. When were the new notes given? A. These notes I have here were given in June, 1927.

'Q. You took his endorsement at that time and extended the time of payment, the original payment? A. Yes, sir.

'Q. Upon what did you extend this credit to Mr. Gibson? A. Upon information which we received from our salesman who was traveling this territory, that Mr. Gibson was a property owner and good for his endorsement.

'Q. Who was that representative? A. Mr. J. A. Pittman.'

The only evidence offered by the complainant was the three deeds. The first deed recited a consideration of $10 and conveyed ten acres of land. The second deed recited a consideration of $3,000 and conveyed thirty-five acres of land. The third deed recited a consideration of $10 and conveyed ten acres of land. The evidence showed the consideration recited in each deed to have been inadequate. The evidence showed that all the...

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